UGLY DUCKLING BOOKS LIMITED

Executive Summary

Ugly Duckling Books Limited is a newly formed micro-entity with limited financial data and no trading history. Its balance sheet shows high leverage and negative working capital, indicating weak liquidity and financial strength. Without demonstrated cash flow or revenue, credit risk is elevated, leading to a decline recommendation pending operational progress and improved financial metrics.

UGLY DUCKLING BOOKS LIMITED - Analysis Report

Company Number: 14722225

Analysis Date: 2025-07-20 14:49 UTC

1. Credit Opinion: DECLINE. Ugly Duckling Books Limited is a newly incorporated micro-entity with limited operating history and no employees. The company’s balance sheet shows a large amount of fixed assets (£265k) financed mainly by long-term liabilities (£240k) which indicates high leverage for a start-up with no current assets. The negative net current assets (-£4,674) and minimal shareholders’ funds (£19,930) raise concerns about liquidity and working capital sufficiency. Without operational cash flow or turnover evidence, the firm’s ability to service debt or meet short-term obligations is questionable. The directors include a chartered accountant, which reflects some financial expertise, but the lack of trading data prevents confident credit approval.

2. Financial Strength: The company holds substantial fixed assets relative to its size but has minimal working capital and high long-term debt. Net assets of £19,930 are very low, reflecting minimal equity buffer. The absence of current assets and presence of current liabilities imply tight liquidity. The micro classification and zero employees suggest the business is at an early stage or a holding vehicle, with no significant operational cash inflows yet. The leverage and thin equity base indicate weak financial strength unsuitable for unsecured or high-value credit facilities.

3. Cash Flow Assessment: Cash flow assessment is limited due to no current assets (cash or receivables) and negative net current assets. The company’s working capital is negative, which indicates potential short-term liquidity stress. No operating income or expenses are reported, and no employees are present, suggesting no ongoing trading activity. The company relies heavily on debt financing of fixed assets, with insufficient liquid resources to cover upcoming liabilities or operational needs.

4. Monitoring Points:

• Future trading performance and revenue generation once operations commence.
• Improvement in current asset base and working capital ratios.
• Reduction of debt levels or increase in equity capital to strengthen balance sheet.
• Timely filing of annual accounts and confirmation statements.
• Directors’ ability to manage cash flow and meet debt service requirements.